COVID-19’s Transmission and Effects on the Economy and Supply Chain

Mar 09, 2020

[Beijing, March 9, 2020] Cheung Kong Graduate School of Business (CKGSB) Assistant Professor of Economics Zhang Gang recently held a webinar with MBA alumni Wang Wei relating to the COVID-19 outbreak, its transmission, and the effects it has had on both the economy and the supply chain.

Here are a few of his key points:

The hospitality industry has been severely impacted by the COVID-19 outbreak. The effect is also felt by the industry’s upper-stream supply chain industries such as the food processing, agriculture, forestry, husbandry, fishing and beverage industries.

The impact of COVID-19 on transportation and logistics industries is also felt by all other industries as they offer services to people and businesses in almost the entire economy. As people are encouraged to stay at home and to limit social contact, transportation and logistics are greatly impacted and the recovery of businesses in other industries are therefore also affected.

Based on my analysis of the supply chain, having people return to work in areas only where the COVID-19 outbreak is mild is not enough to ease the pressure on China’s economy. A lack of upper-stream suppliers or down-stream retailors for example, would negatively affect other sections in the supply chain. We should balance the need for economic growth and to effectively deal with COVID-19. Caution is still required to curb the spread of the virus to the wider community.

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